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Just as investors were expecting a pretty standard second-quarter announcement from Amazon.com, the innovative online retailer came out with a doozy.

Amazon.com on Monday disclosed America Online is making a $100 million equity investment in the giant online retailer and said the two companies will team up to develop and offer "an enhanced online shopping experience" for users of AOL's interactive brands.

Meanwhile, Amazon reported a second quarter pro forma net loss (including net interest expense) of $58 million, or 16 cents per share, compared with $116 million, or 33 cents per share in the second quarter a year ago. Analysts on average had expected the company to lose 22 cents a share in the second quarter.

Net sales were within the range of the company's guidance, increasing 16 percent to $668 million, compared with $578 million in the second quarter of 2000.

Dulles, Va.-based AOL -- half of the AOL-Time Warner behemoth -- said the multi-year strategic alliance will "join Amazon.com's industry-leading platform and online retail expertise with America Online's technology and popular shopping environment."

AOL has had a marketing relationship with Seattle-based Amazon since 1997. There was no hint of the equity deal before the closing bell on Wall Street and Amazon stock closed Monday down 95 cents at $16.03.

The market didn't much like Amazon's forecasts, however, sending the stock down another $1.08 after hours to $14.95.

Amazon said net sales for the third quarter are expected to be $625 million to $675 million, short of Wall Street's $730 million average expectation. Net sales for the fourth quarter are expected to increase between 10 percent and 20 percent over the fourth quarter of 2000, the company said; earlier guidance had been for a 20 percent to 30 percent increase.

Amazon.com will continue to own and operate its technology while providing America Online with search results, personalization features, product comparisons, ratings, and reviews to enhance the shopping experience for AOL and CompuServe members and users of AOL's other Web-based brands.

America Online and Amazon.com also said they will continue to work together on future e-commerce initiatives to benefit consumers, such as marketing initiatives, customer authentication and wallet services, and extending the alliance internationally.

"This is an excellent new relationship for our Platform Services Group," said Jeff Bezos, CEO and founder of Amazon.com.

On the earnings front, Amazon's fully diluted net loss (GAAP) for the quarter improved by 47 percent to $168 million, or 47 cents per share, from $317 million, or 91 cents per share.

"We continue to make progress toward reaching pro forma operating profitability in the fourth quarter of 2001," said Warren Jenson, Amazon.com's chief financial officer. "This quarter, the U.S. was profitable on a pro forma operating basis for the first time, and this is our sixth sequential quarter of improved absolute pro forma operating results."

Amazon execs met with analysts in June and reiterated that they expect the retailer to achieve a pro forma operating profit in the fourth quarter of this year.